Uber drivers to start setting their own fares as firm seeks to comply with state laws

GLOBAL – Uber has commenced a trial run for a new initiative to give drivers the ability to set their own fares and make them independent operators rather than employees.

Already select drivers are currently experimenting with the scheme in some cities in the United States, with the ultimate aim being granting them (drivers) more autonomy.

The Wall Street Journal reported that Uber drivers in Palm Springs, Sacramento, and Santa Barbara in California had been given the ability to determine their own fares.

The journal reported that the move was part of an Uber test designed to “give them more autonomy in response to the state’s new gig-economy law.”

Under the new law, independent contractors would be reclassified as employees, and entitled to basic labor protections and benefits.

This is expected to add an additional 20 to 30 percent in labor costs for companies like Uber.

The fare-bidding system is part of a series of changes that Uber has made in California in an effort to position its drivers as independent contractors and not employees.

“Since AB5 has gone into effect, we’ve made a number of product changes to preserve flexible work for tens of thousands of California drivers,” an Uber spokesman told Quartz in a statement.

 “As a result, Uber claims that such a feature gives the drivers more autonomy, therefore allowing them to continue to be classified as independent contractors rather than as employees.”

The Journal added that drivers could see trip information before accepting or rejecting it without punishment and be selected as user favorites if given a five-star rating.

But critics of the move aren’t convinced that such moves will benefit drivers.

Since jobs go to the lowest bidder under the new rule, some believe drivers will end up earning far less than they did under older regulations.

 “This may very well mean that drivers are earning less than they are right now because in a desperate effort to out-bid each other, they will lower the fares instead of increase them,” wrote Veena Dubal, a professor at the University of California Hastings College of the Law.

Even as the report stated that the ability of drivers to determine fares is an “initial test,” it pointed out that whether the feature would roll out in other regions or remain in the state of California remained unknown.

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